“Given the widespread tightening of economic conditions with so many significant rate hikes during the month, the portfolio was able to benefit from short, fixed income exposures across the entire US Treasuries curve, across UK fixed income, as well as across German, Canadian and Korean bonds,” Razvan Remsing, Aspect’s director of investment solutions, said.
At the Tulip Trend fund, returns rose 11% in September as the strategy benefitted from short bets on U.S. bonds, gilts and the pound, according to its investor letter. The Lynx fund gained 9.3% during the month, putting it on track to match or exceed its record gain of 38% in 2008.
With inflation rising, traders are betting that central banks will have to continue tightening rates and removing liquidity. Greenig of Florin Court said the main question is whether the macro environment has settled, or remains unstable.
“I see instability - inflation, tightening, high levels of debt, de-globalization, de-carbonization, geo-politics, and broken, polarized politics in the West,” he said. “Central banks moreover are cornered by simultaneous inflation and economic weakness.”
This article was provided by Bloomberg News.